FTSE 100: Banks prop up anaemic blue-chips

Royal Bank of Scotland (LSE: RBS.L - news) headed up the large-cap index, which made modest gains in morning trading.

Despite posting a £2bn loss , Royal Bank of Scotland led a rally in banking stocks, rising 4pc. Its (Euronext: ALITS.NX - news) stablemate, Lloyds Banking Group (LSE: LLOY.L - news) , rose 2.8pc.

That helped prop up a rather anaemic FTSE 100 (Euronext: VFTSE.NX - news) , which managed to rise only 9 points to 5,925, paring gains made in early morning trading.

But David Morrison, market strategist at GFT Global, pointed out: "The FTSE looks finally to be pushing out of the 5,920 straight jacket this morning, and if it can manage that break out its 2012 highs must be in sight."

Equity markets also got a boost from better-than-expected German IFO business sentiment index which countered weaker- than-expected Eurozone purchasing managers data released on Wednesday.

Heavyweight commodity issues got a boost from the better European data as the demand picture improved, with miners rallying after recent falls as copper prices moved higher, and integrated oils also gaining as crude pushed ahead.

Randgold Resources (Xetra: A0B5ZS - news) and Fresnillo (Frankfurt: A0MVZE - news) each advanced 2.8pc while Cairn Energy (NYSEArca: JJE - news) put on 1.7pc.

Investors were wading through a slew of blue-chip results on Thursday morning. Amongst those updating the market was Capita , which topped the leaderboad, rising 4.7pc after the outsourcing giant said it was confident of better growth prospects this year.

The group won contracts totaling a record £2bn in 2011 but over half came in the form of less profitable renewals. This, coupled with government budget cuts, contract delays and increasing competition, saw organic revenues decline 7pc. Group revenue rose 7pc to £2.93bn.

Capita has started 2012 in different fashion, however, seeing off rival Serco as preferred bidder on a deal to run recruitment services for the British Army, and on Wednesday securing a contract to manage the provision of training across the Civil Service.

British American Tobacco declined 1.6pc despite increasing its share buyback to £1.25bn after the maker of Dunhill cigarettes raised prices and saw strong growth in emerging markets .